Ethics rules proposed for pension trustees, lobbyists

Governor seeks more disclosure, penalties

SPRINGFIELD — Gov. Rod Blagojevich proposed a package of ethics reforms Friday that would eliminate the type of windfall payments lobbyists have received as part of the state pension deals now under federal scrutiny.

The Democratic governor said failing to hold the pension systems to the highest ethical standards would "breach the public trust."

The governor's announcement is part of a growing pension reform movement after the indictment of Stuart Levine, a former trustee of the Teachers' Retirement System, and the Tribune's disclosure of the windfall payments to a top national Republican official.

Levine, indicted in multiple federal corruption cases, allegedly abused his trustee position to extort hundreds of thousands of dollars in kickbacks in a probe that has snared two other attorneys. Levine, a prominent Republican fundraiser who also contributed to Blagojevich, has pleaded not guilty.

Robert Kjellander, treasurer of the Republican National Committee, has netted $4.5 million from The Carlyle Group, a Washington-based firm, for six deals totaling $500 million with the teachers' fund since 2002.

Kjellander's fees were contingent upon the size of the overall investment and were "certainly a major factor" in the governor's push for reform, said John Filan, Blagojevich's budget chief. Kjellander has not been accused of wrongdoing.

John Day, a top aide with the teachers' fund, said officials fully support some of the proposals and will work to craft the solutions as they move forward with their own changes.

Pension trustees could not leave a board and take a job immediately with an investment firm under the governor's proposals. Offenders would be subject to stiffer penalties. Several provisions call for more disclosure of the trustees' financial and business relationships.

Chicago Public Schools officials also confirmed they received a federal subpoena for records relating to the district's dental insurer, which has been affiliated with Levine.

The subpoena seeks records, contracts, copies of checks, handwritten notes and e-mails relating to CompDent, CompBenefits, Dental Care Plus and other related companies from 1996 through the present.

Levine was listed as president of Dental Care Plus in 1996, the year the company was sold to CompBenefits, also known as CompDent, records showed.

CompBenefits said the company had a contractural relationship, but would not elaborate. The company said it is cooperating with authorities and is not a target of probe.